Today started like most others, with my daily dose of humour and news watching Breakfast on TV One. Over the past few days, there have been a number of articles online in New Zealand suggesting that 1000 people join the unemployment benefit weekly with a projection of 60,000 people being restructured over the next 12 months. Alot of the initiatives that where floated at the February job summit seemed to have stalled, or appear to have had little impact at this stage.
The Global Financial Crisis (GFC) is having a major impact on the way we do business, the way we look at new opportunities and as well as the social implications on how we live our daily lives.
The requirement to be fiscally responsible can be interpreted as ‘stop spending all money, reduce staff, cut back anything that looks large or complex’, I question whether that is the right thing to do?
Information Technology is in a strong place to add real business value and be a real asset in driving costs out of the business to help cushion the impact of this global recession. Core infrastructure is often neglected and overlooked by organizations - it is the foundation that we build our business on and around. This can be either a strategic asset and enabler, or a noose around our neck in terms of our ability to move with the times, be supported, supportable, secure, reliable, as well as enhancing our ability to interoperate with other systems, applications and vendors. If you have leaky pipes, do you want to spend your time and money fixing leaks or laying new pipes that give your business increased profitability and a competitive advantage?
As times get tougher, businesses look at ways of driving costs out of the business, often it’s going through a P&L and looking for large items of expenditure and asking/confirming do we really need these and making the call. e.g.: Maintenance agreements / Support Agreements can be expensive, however they provide a level of insurance in the event of failure. This could be seen as a quick win in terms of immediate cost savings; however the longer term implications of terminating such things need to be taken into consideration. Like all discussions with vendors, it’s wise to evaluate the level of service you need and receive for the level of money you pay. If you aren’t receiving the level of value you believe you should be, then it’s time to have that conversation and keep parties honest. Finding large cost items to remove is generally given to the budget owner, but IT must understand that they are employed by the business to provide services – the platform for the business to make money. We need to bare this in mind when we look at cost savings and the flow on effect of these decisions for today and tomorrow.
IT departments have come a long way from a place where the ‘geeks’ are, where they have the latest and greatest toys, deploy new versions of software just because it’s a new version, however I’m not certain we are as business aligned as we can and should be. We need to get closer to the business, become part of their vital business functions and enable them to achieve the business outcomes they need. I come from a background in infrastructure and understand how it’s very easy to become siloed and focused on the task at hand, rather than taking a step back and understanding, listening and delivering to the businesses requirements.
With shrinking budgets, headcount, time and resources, we need to look at the ways we can make a difference to the organisation. There’s no rocket science here –
Business Alignment - Understanding what is important to the business, what they see as the money earners this financial year and beyond, understanding their challenges, what they deem as critical and must have services. We need to continue to build strong relationships with key stake holders so that we are included in and assist with decisions made for the business. By doing this, we can align IT projects and look for quick win opportunities and drive project consolidation. Focus on risks and how IT can mitigate against them by reducing the likelihood of things happening. Understand your competitors, their weaknesses and where you can focus to grow market share and increase your competitive advantage. In order for businesses to make well informed decisions, they need to have decent information. This clearly falls in the realms of IT, business analysts and finance departments.
Virtualization – Looking at opportunities to reduce cost in terms of power consumption, platform consolidation, floor footprint, retiring older/non-supported hardware and software, maximise hardware capability, automation, smarter disaster recovery options, lab, testing and development environments, fault tolerance - all to improve availability/reliability/maintainability/manageability and remove longer term costs.
Business Automation – Work with the business to understand opportunities to leverage technology to automate and drive costs out of the business through smart automation – align to the businesses 1, 3, 5 year strategic plan. IT will never be anything other than a cost centre unless we align to the desired business outcomes.
Realising the value of the software you own – Customers buy software in a variety of ways from vendors. Some of these options include maintenance which may entitle you to newer versions of the software once it becomes available. IT are in the best position to interpret the business requirements, understand how and what the organisation are licensed for, and therefore potentially save money through smart deployment. Alot of purchased software sits on the shelf un-installed, this can be due to the fire fighting nature of the organisation/IT, changed or different business priorities, or a disconnect between procurement and IT and the business. Newer versions of software typically offer more features and functionality and therefore value if deployed. It’s also an opportunity to understand and explore the alternative options for purchasing/deploying software. There are now a variety of purchasing options available that include software for on premise (traditional), off premise (in the cloud) and a hybrid via subscription as well as vendors also offering attractive financing options.
Consolidation of technologies and platforms – When I visit customers, it’s not uncommon for them to have multiple versions of operating systems and applications, some are within support and others clearly are not. It can be hard to turn off old machines as new systems are introduced due to lack of documentation, understanding of the flow on affect, hard coding in custom written applications etc, so we need to leverage technologies such as virtualization to overcome some of these hurdles. We need to look at the toolsets the organisation need and use and why different business units have different tools for the same/similar job.
Proactive Engagement – We need to have the right tools to understand how our environment is behaving, and why. History teaches those who listen, and monitoring your environment and having the right tools to take action is a must. We need businesses to understand that in order to have a healthy car, it needs to be regularly serviced (health checks) as well as maintained. Best practice at the point of deployment don’t mean its best practice long term – Technology, learning’s, and operational tasks should be reviewed regularly and amended as it makes sense.
Unified Communications – Telephony and collaboration costs can be significantly reduced by smarter delivery options. The ability to take your phone extension with you while you travel adds huge value, as well as being able to reduce toll calls by dialling out of local points of presence. UC is an enabler for driving costs out, as well as reducing the requirement to travel by using the right conferencing technologies.
The Team – We need to look after the people that oil the cogs, continue to develop and grow their capabilities, and provide opportunities as well as helping them to have a balanced work and home life.
By understanding business processes, and aligning IT to increase efficiencies, availability, reliability and performance, you can have a large impact on profitability as well as delivering greater value and more choices to your customers.
As I reflect on the past few months, and the number of phone calls I’ve had from people affected by restructures, it’s fantastic to see companies investing in people and doing the right thing as much as possible through employee assistance programs (assistance with preparing CV’s, helping understand alternative career options, counselling) and putting staff and their families affected in the forefront as they go through very tough times.
The point I’m trying to make is, that in order to move forward, become agile, increase profitability and retain skilled staff, we need to build tighter relationships with the business, understand what they want to achieve and when they need to achieve it. We need to advise them on what is technically possible; everything has a cost, even if you choose to do nothing. Through communication, technology and a bit of hard work, we can better use the assets we have today and deliver for the needs for tomorrow.